Los Angeles daily herald., 1887-08-07
All Abeut Coffee.


Within year or two, fair Rio coffee
was sold at wholesale at 7ls cents a
pound, and was lately quoted as cost
ing the importer 201a cents to lay it
down from Rio Janeiro-ad difference of
13 cents a pound, or nearly 200 per
cent. From all reports that can be
collected, the crop of coffee all over
the world is short. No one is able
to explain this; but the fact re-
mains that it is so. The crop Of Java
is stated to be less than one-third OF
an average. According to government
estimates it will be only about 440, ,00O
piculs, or bags, against an average
crop of 100000 bags. This variety
advanced 10 cents per pound. An av-
erage crop of Rio is about 4,500,0 ,000
bags; of Santos, 5000, 900, making a
total OF 100000 bags. The esti-
mated crop of Santos and Rio for the
year beginning July l, 1887, is less
than $3.50, 600 bags-a terrible falling
off. There is generally about 1000
bags of the old crop left over; but this
customary surplus is now consumed.
In Ceylon, the leaf disease has re-
duced the production by at least one
half. Thus the supply of the very
best coffee is sure to be smaller this
year than it has been for generation.
The highest figures are paid for My
sore coffee, which is considered the
best grown. Mysore is a part OF up
per British India, and the cultivation
of the berry is entirely under Euro
pean control. Thus far the leaf dis
ease, which has spread such havoc in
Java and Ceylon, has left British
India alone; but how long it
will do so it is hard to say. All at
tempts to grapple with the disease
have proved fruitless, and, il it ever
puts in an appearance in Brazil, the
days of coffee drinking are numbered.
There are those who believe that, un-
less the leaf disease can be grappled
with successfully, it is only ques-
tion of time when cup of coffee will
be as great luxury as a bottle OF
champagne.
Another reason for the higf value Of
Rio was rise of at least 40 Or. cent.
in the rate of exchange. This very
unusual advance made difference Of
nearly Az cents a pound in the cost Of
importing Rio. With the nearly 23
per cent short, and the rate OF
exchange 60 per cent. higher
than usual, it looks as though high
prices had come to stay. Should they
continue, coffee drinkers in the United
States will pay $50, 900, 900 more for it
than they paid in 1885, and $60,OO0,-
600 more than they did in 1882. The
rise in price is equal to the imposition
of 81 on every man, woman and child
whether coffee drinkers or noD in the
country.
Speculation, however, has had much
to do with high prices. The only
Coffee Exchange in the country
is in New York, which has had
great boom. The fever has been
higher than ever before in the history
of the trade. There has been more
gambling in it than in any other gro
Gerry staple. The uncertain outlook of
the supply brought outsiders into the
speculation. Cotton brokers, and even
Wall street financiers, went into the
option market, as the activity on the
Coffee Exchange was for some time
more attractive than either cotton or
stocks. Syndicates have been often
formed to bull the market; but in the
majority of cases, they have failed.
The syndicate of 1883, after costing
the consumers of coffee over $8,000,-
600, lost more than it made, and
brought down several large houses.
The principal members of that syn
dlcate were Havre and Rio houses,
with some few New York firms
added. The present syndicate which
has been booming prices, is composed
of New York, French and Brazilian
houses, and is by far the strongest
ever formed. The advance began in
Rio de Janeiro, where the operators,
believing that the new crop would be
much smaller than the average,
began successful speculative
bull movement, and for while
slowly forced the prices up. The
French operators then took hold Of
the market, and, by vigorous option
buying in Havre, caused the prices to
advance sharply. The influence Of
the Havre market, and the fact that
French operators placed considerable
orders for stock in New York, caused
the American market to follow the
Havre and Rio markets in their up
ward course.
The consumption Of coffee in late
years has increased much more rapid
ly than the supply. In 1867 the con-
sumption per capita was AT pounds
in 1873, the first year after it was put
on the free list, it was 9.67; in 1884 it
was $50, and it has since increased.
In 1860 the price Of fair Rio was
13 cents; in 1870, 10 to liz cents !;
in 1880, IA to 141a cents. From
that point it went down to ~ cents
in Eastern markets, and then nearly
trebled in value. But, as most al
ways happens in such movements,
the bulls overdid the matter and
brought on q sharp reaction. Near
the middle of last month there was a
decline of 6 cents pound in New
York in a short time, which scorched
outsiders badly. Present indications
are that the top of the boom has been
struck. An advance of 200 per cent.
ought to be enough for one year, even
if there is short rop.-[Bankers'
Monthly.